Sunday, November 19, 2006

The AP reports on Democrat plans to increase energy costs and reliance on foreign oil:

Incoming House Speaker Nancy Pelosi, in an outline of priorities over the first 100 hours of the next Congress in January, promises to begin a move toward greater energy independence "by rolling back the multibillion dollar subsidies for Big Oil."

...

Topping the list for repeal are:

-Tax breaks for refinery expansion and for geological studies to help oil exploration.

-A measure passed two years ago primarily to promote domestic manufacturing. It allows oil companies to take a tax credit if they chose to drill in this country instead of going abroad.

Democrats say neither tax benefit should be needed for an industry reaping large profits at today's high crude oil prices.

Deregulation might be a better solution to the lack of refining capacity, but that seems to be complicated by state regulations as well.

Tax breaks are very useful for promoting domestic energy exploration and encouraging development of resources that might not otherwise be economical to access. Just because oil companies are able to make money doesn't mean they will (or should) put any of it into otherwise unprofitable or barely profitable ventures.